As I keep repeating many family business owners are exclusively focused on operational matters. Such a mindset is based on continuous steady improvements. It is a mindset that works well when the need for change is slow and easily manageable. A level of change that can be handled through investments, work faster in some areas, improve processes somewhat, tinker with products and services, and promote talent as needed – but they make these changes incrementally with the goal of keeping things steady. This operators mindset is rooted in stability and deep familiarity with how things will likely shape up round the next corner. To be honest, this mindset has long suited family enterprises. The reason such a mindset has worked is because industries and business models in the past have evolved slowly, over long periods of relative stability. When change has been needed, adaptation could take place naturally, as the pace of the business world moved in step with families’ natural instinct to change slowly and wait for the right time.

NEWS FLASH: THE DAYS OF STABLE AND SLOW CONTINOUS CHANGE ARE BEHIND US FOREVER.

Just look back on just the past 4 years. The world has changed dramatically. Some changes we are seeing globally are the following:-

1. A tight and selective labour market, whereby employees are looking at work in a complete different way and whereby having flexibility and work-life balance has become a pre-requisite.
2. Shift of consumer preferences, towards on-line solutions coupled with an increased importance towards cheaper and more value for money propositions.
3. However, while the rise in inflation, meant that consumers became more price conscious, the pandemic experience meant that they would not be ready to give up certain ‘luxuries’ like dining out or even more so, going on holiday.

This fast pace of change means that relying on an operator’s mindset becomes a liability rather than an advantage. I normally see all types of symptoms of this mindset – business leaders that hardly have time to answer an email or set a meeting, business leaders that always have their plate full but never seem to get anywhere (like running on the spot) and the list goes on. Normally they are likely to blame everyone else and likely to tell me that all those around them are incapable. They feel lost and overwhelmed.

Success today requires blending the “operators’ mindset” with the owners’ (Strategic) mindset. In contrast to the operators’ mindset, the strategic/owners’ mindset focuses on the BIG PICTURE by taking a high level view of the trajectory of the business, industry, markets, competitors, assets and family. By doing so they are able to move into growth opportunities by prioritising value-creating activities and rejecting value-destroying activities sustained from old senses of loyalty, tradition, attachment or conflict avoidance.

In more detail, family business owners with a strong strategic mindset, make sure to do following:-

• Setting the owners’ Strategic Vision for what they want to achieve.
• The focus on making good bets on Capital Investments (including when to exit bad capital investment bets) and good bets on key people (including when to change people in key roles).
• Working incessantly on setting, protecting, and adjusting the Culture within the family business, that is key success.
• Design the right Governance for the family business so decision-making structures and processes are effective
  

In my experience with family businesses, I have seen family business owners that are uniquely capable of having the mindset of both an operator and an owner/strategist at once. In most cases family business owners embody just one mindset – this is fine as long as they appreciate the value of the other. What MUST BE AVOIDED AT ALL COST is family business owners that adopt just one mindset—usually the operators’ mindset—becoming the religion of the family business.

Good family business owners do not neglect operational excellence by any means, but rather delegate operational excellence to a capable management team (whether family, non-family, or both). Owners need to embed the family’s values within the company; they need to arm managers with the owners’ vision and the board’s approved strategy, and let them operate.

In disruptive times, it is the strategic mindset or the absence of it, that often makes or breaks the family business. Without taking steps to establish and reinforce a strategic mindset at the top of your family enterprise, past successes of the family business may become nothing more than that—something of the past.

It is for this reason that at EMCS Academy we have developed the uniquely accredited (at MQF Level 5) course “Award in Leading a Family Business”, with a full module dedicated to having a Strategic Mindset and how to build a Strategic Plan. The 2nd cohort of this course will now start as from 1st October. Click HERE to review the details of this course and to REGISTER.

Click HERE to view a short video of testimonials from C.Cini Group, Lewis Press, Oxford House and Neriku that attended the 1st cohort of this course.